Advocates Fear Exploitation of Funeral Consumers

Oct. 18, 2004

By ERIC NOE

Planning a funeral presents a litany of questions: How much should it cost? Should you pay more to make sure the body is "preserved"? Is it a good idea to prepay for your funeral? Don't know the answers to these questions? You're not alone.

The struggle to properly remember a deceased loved one is a painful, overwhelming experience, one often helped by guidance from a professional funeral director. But some consumer advocates fear that rather than assisting their mourning customers, some in the funeral services industry are exploiting them for profit.

The simple fact is that very few people plan ahead for death or the arrangements that accompany death, leaving the funeral services industry flooded every year with uninformed customers. Because of this, funeral directors are charged with not only navigating their clients through grief, but running a business that does not take advantage of their ignorance and emotional strain.

It's a trust many in the industry embrace. But with the odds stacked against the customers, is it wise to trust them all? Not always.

"The way the industry operates is beyond the view of consumers because people don't want to think about death or talk about death," said Lamar Hankins, a Texas lawyer and former president of the Funeral Consumers Alliance, a national nonprofit consumer group. Hankins is now chairman of the FCA's legal committee.

The industry is rife with price gouging and misinformation, according to consumer advocates. Hankins said it's not unusual for funeral homes to mislead clients about the cost of their services, often marking up casket prices 300 percent to 700 percent above wholesale price. And too many give false information about services like embalming or the preservation of the body, Hankins said.

"They'll tell a family that a more expensive casket will preserve the body or that embalming is necessary," Hankins said. "Caskets don't preserve bodies, and the U.S. embalming process is only intended to keep a body preserved for a couple of days."

Corporate Funeral Growth

Karen Leonard, president of the Redwood Funeral Society in California and a funeral consumer advocate for more than a decade, said increased corporate ownership of funeral homes during the past 20 years has escalated prices industry-wide.

The National Funeral Directors Association estimates the national average cost of a funeral at $6,500, and Leonard said prices could continue to rise if consumers remain in the dark.

"The bigger the conglomerate, the higher the price," she said. "Unless consumers demand change, we're not going to see it."

It's a trend that bothers some small funeral home owners.

"Big corporations have come in and driven the prices up," said Dominic Hassara, a second-generation funeral home owner in St. Paul, Minn. "They've bought enough places that they can control markets and set prices all across that market."

Hassara said price increases are at least partly due to higher overhead costs as funeral homes make the transition away from small, family-owned operations.

"It used to be that a funeral home was an old house. Now they've built these big, Taj Mahal-type buildings, and they've got to pay for them," he said.

Large Settlements

Some of the most egregious accusations have been leveled at corporate-owned operations.